Last month, TES revealed that the new compulsory National Living Wage for all workers over the age of 25 will not in fact apply to apprentices, whose current minimum wage is just £2.73 an hour.
Since chancellor George Osborne made the July Budget announcement, apprenticeship pay has been a hot topic for debate; especially given that one in seven apprentices are paid less than the minimum wage.
Despite plans to increase the apprentice minimum wage to £3.30 later this year, there’s still no proof that the 621,000 apprenticeships created between 2011 and 2014 will be covered by the government’s new living wage deal, which will introduce a wage floor of £7.20 an hour, rising to £9 an hour by 2020. Furthermore, while it’s great to see that the government is doing more to boost apprenticeship provision in the UK by bringing in a new apprenticeship levy, how can we be sure that this will really make a difference?
Are young apprentices at risk of being exploited? Apprenticeships have become a key part of our talent pool and provide excellent opportunities for young people to gain invaluable experience and develop the skills needed to succeed in the world of work, while enabling them to earn at the same time. However, apprenticeships also allow employers to fill skilled roles at a relatively low cost, putting apprentices at risk of being seen as cheap labour.
One concern of mine is that the low minimum wage for apprentices will leave young people vulnerable to exploitative companies who offer poor or even fake apprenticeships to get away with paying peanuts. Last month, skills minister Nick Boles launched a crackdown on corrupt apprenticeship providers trying to pass off basic, low-quality training courses as high-standard qualifications. This was in response to the Department for Business, Innovation and Skills being alerted to several cases of bogus providers.
As the UK’s voice for student apprenticeships, we find this incredibly alarming. It is extremely concerning that young people, taking that daunting first step into the world of work and genuinely looking to learn the skills to meet the needs of the growing economy, are being misled in this way. What’s more, apprenticeships should be seen as a route to a rewarding career but examples of bad practice are tarnishing that reputation and could dissuade young people from considering an apprenticeship or school-leaver programme.
Support from businesses is crucial. According to a 2015 study by the Centre for Economics and Business Research, a quarter of consumers would be more likely to pay for goods and services offered by businesses employing apprentices. Meanwhile, firms employing apprentices can enjoy increased long-term productivity and other economic benefits, with apprentices delivering an average positive net gain of £1,670 per annum to their employers. But if they want to realise the benefits, businesses really need to know how to support these young people.
In order to reduce apprentice attrition, employers must focus on ensuring that their trainees feel valued and supported, especially given the disparity between the pay levels for apprenticeships and their colleagues earning the national minimum wage. The widening gap between these pay levels is an area for concern, but businesses can support apprentices by educating them about their job prospects, pay brackets and opportunities for progression. If apprentices feel as though they are working towards a tangible goal, they’re more likely to apply themselves and stay motivated.
Many young people who take on an apprenticeship are committed to following a particular career path and are invested in learning the skills required to fulfil a specific role within that industry. It is important that companies focus on their apprentices' experiences, nurturing them throughout the training programme to ensure it's a long-term arrangement and not just a quick fix.
In order to attract the best and freshest talent, an apprenticeship providers needs to be seen as an employer of choice, providing high-quality training programmes and equal opportunities for all its members of staff, apprentices included. I hope that incentivising companies to take on more apprentices really will make a difference by encouraging growth in this area and ultimately improving pay levels.
It’s already great to see that Mr Boles is planning to legally protect the term "apprenticeship" as this will strengthen the reputation of apprenticeships and ensure that they’re recognised as a career path equal to higher education. I just hope that businesses don’t forget that developing apprenticeship programmes and securing the best talent should be their focus, not increasing revenue on a purely commercial agenda.